Mount Vernon school district files new tax-break lawsuit vs. city

Demolition has begun at a former supermarket at 42 W. Broad St. in Mount Vernon's Fleetwood neighborhood. A 16-story residential-retail tower will rise at the location. (Video by Jonathan Bandler/lohud)
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An artist rendering of part of Enclave Equities' proposal for six buildings on MacQuesten Parkway and Locust Street near Mount Vernon's Fleetwood train station.(Photo: Enclave Equities)

The Mount Vernon school district is asking the state Supreme Court to cancel a tax-breaks deal for the developer of the Enclave at Fleetwood.

In legal papers filed Jan. 16 in state Supreme Court in White Plains, the Board of Education argues that the Mount Vernon Industrial Development Agency exceeded its authority when it made a 25-year payment-in-lieu-of-taxes agreement with Enclave Equities.

School officials cited language in the IDA's incorporation papers that they interpret to mean that tax breaks are for senior or affordable housing, not market-rate housing as the Enclave has been described.

However, the IDA's bylaws also state that other eligible projects of a type not specifically stated in the document can "be determined based on project characteristics, financing needs and projected benefits to the city."

The Enclave would be built at 525 and 645 MacQuesten Parkway and consists of a cluster of five five-story buildings with 179 one- and two-bedroom apartments.

The school board's legal papers state that the PILOT agreement allows the developer to pay less in property taxes on the $47 million project than is currently paid on the old warehouses that now occupy the land.

In 2016 the owner of the future Enclave parcels paid $475,057.35 in property taxes, according to the school board's calculations.

The Enclave's gradually increasing PILOT payments would be $110,180 in 2019, the first year, and $223,973 in the 25th year for the parcel at 645 MacQueston Parkway, according to the IDA agreement.

The parcel at 525 MacQueston Parkway would pay $74,080 in the first year and $150,589 in the final year.

"The negotiation of such terms by the MVIDA is an abuse of discretion, is not supported by substantial evidence and constitutes an illegal gift of public funds," the court papers state.

The legal action is the latest effort by the Board of Education to stop city officials from making PILOT deals. In 2016 the school board asked the court to annual previously negotiated tax agreements. That case remains unresolved.